Over 51,000 traders faced losses from Kanye West’s newly launched memecoin, revealing the risks associated with trading celebrity-endorsed tokens that lack inherent technological value.
The YZY token, connected to Kanye West, debuted on the Solana blockchain on August 21. It surged by 1,400% within just the first hour before plummeting by over 80%.
Among the 70,200 traders who invested in this celebrity-backed token, over 51,800 reported losses, with three traders losing more than $1 million, as per data from blockchain platform Bubblemaps.
“Meanwhile, 11 wallets made over $1 million,” noted Bubblemaps in a post on Wednesday X post.
In the midst of widespread losses, only 11 out of 70,000 wallets earned more than $1 million, while 99 recorded profits over $100,000, underscoring the financial risks associated with celebrity-endorsed meme tokens that lack blockchain utility.
Currently, the YZY token’s price has dropped by over 80% from its peak, trading at $0.5515, with only 19,531 traders holding the token, according to data from blockchain intelligence platform Nansen.
Former kickboxing champion Andrew Tate was among those attempting to benefit from the rapper-endorsed token. Tate took a 3x leveraged short position on the YZY token, resulting in a total loss of $700,000 on the Tate-related Hyperliquid account, as reported by Cointelegraph on Friday.
Related: Crypto whales buy $456M Ether in “natural rotation” from Bitcoin
Hayden Davis “sniped” YZY token launch for $12 million: Bubblemaps
In the aftermath of the YZY incident, the blockchain data platform highlighted Hayden Davis, co-creator of the Official Melania Meme (MELANIA) and the Libra token, as a potential insider.
Davies regained access to his funds on August 21, following a judge’s decision to unfreeze $57.6 million in USDC (USDC) stablecoins related to the Libra token scandal, Cointelegraph reported.
“Despite our efforts as investigators, builders, and communities – the same names keep perpetuating the same scams,” wrote Bubblemaps in a post on Wednesday X post, adding:
“The next day, Davis (Kelsier) exploited the YZY launch and earned $12M.”
“Naseem: A network of snipers linked to Naseem, recognized for generating $100M on TRUMP, was the first to purchase YZY. These snipers consistently lead, reaping millions,” the platform added.
Related: Ether trader nearly wiped out after epic run from $125K to $43M
Despite generating significant retail interest spikes, most celebrity-backed cryptocurrencies struggle to gain momentum and develop into large-cap tokens.
Since June 2024, over 30 celebrity-endorsed tokens have launched on Solana, witnessing price drops of no less than 73.23%. Celebrities involved in these endorsements included 50 Cent, Caitlyn Jenner, Iggy Azalea, and soccer legend Ronaldinho Gaúcho.
Tate also entered the Solana memecoin scene on June 7, 2024, endorsing more than 10 tokens, most of which suffered losses of around 99% shortly after the endorsements.
Magazine: Altcoin season 2025 is almost here… but the rules have changed
